Risk management, monitoring, and reporting are important considerations in a variety of contexts involving financial and legal transactions. Parties to a deal (e.g., agreement, transaction, or other contractual instrument that creates rights and/or obligations for one or both parties) often enter into the deal with an understanding as to what obligations may be incumbent upon the parties in an event that specified occurrences transpire in the future. Various vehicles or instruments may pertain to an underlying asset and may involve certain rights or obligations associated therewith. For example, in an event that a credit rating of an underlying asset (e.g., a security) falls below a specified threshold, a party to the deal may be subject to an obligation to cure (remedy) the situation such as posting collateral, procuring a guarantee in the form of an indemnity, or in various other ways. Collateral posting options may include, but are not limited to, any of the following: mark to market (MTM, or accounting for the value of an asset or liability based on the current market price of the asset or liability or similar assets or liabilities); premium over MTM; aggregate of all premiums due; present value; and weighted average life of trade. Typically, such cures have associated time requirements. Conventionally, maintenance and monitoring of deals and cures has been a cumbersome task for several reasons.
One challenge associated with risk monitoring of rated legal entities related to a deal portfolio is the sheer volume of deals that is typically present. For example, a deal operator (e.g., one who performs risk management or monitoring functions associated with deals) may have to maintain and/or supervise a portfolio of hundreds or even thousands of deals. Another challenge is that each deal may have sophisticated, complex legal provisions pertaining to conditions that may necessitate a cure, e.g., to avert a ratings downgrade for a party or some other adverse consequence.